Thursday, October 28, 2010

It's a long way from Main Street America to Capitol Hill, a distance most small business owners prefer not to travel. But chances are, greater numbers than ever before may be packing up and moving to Washington, D.C. next year to take their seats in the 112th U.S. Congress.

After years of pleading with Congress to stop wasting their tax dollars, help them provide affordable healthcare, limit unnecessary regulation and red tape, many entrepreneurs felt they had no other choice but to place their names on the November 2 ballot.

Of the more than 200 congressional candidates the National Federation of Independent Business met with this year, more than half are active small business owners or have close ties to small business. More than two dozen are current members of the association.

And if elected, they'll bring with them something that is woefully missing from the legislative chambers: a spirit of optimism. After all, to launch a small business and succeed in the marketplace, one must be an optimist.

Most have reservations about entering an environment that has become poisoned with partisanship and stalled by gridlock. They worry that their businesses will suffer without their daily, hands-on guidance and they suspect this decision could be costly to their families and their futures as well. But, the alternative, they believe, is worse.

In virtually all discussions, it was evident they believed Congress and the White House had forgotten them and had abandoned the basic principles of free enterprise for political gain.

Small business owners have grown weary of the misguided efforts by those in power who have kept the economy stalled, unemployment lines growing and spread fear and confusion among consumers, investors and future entrepreneurs.

These candidates have committed themselves to restoring the core values that built the world's greatest free enterprise system and to re-educating Washington that you can't spend what you don't have, that governments don't create jobs or generate wealth.

America should expect those of this group who are elected to offer practical ideas, such as ending ill-conceived stimulus programs, bailouts and cash-for-clunkers gimmicks to trick consumers into boosting the economy. Consumers will spend when they have real jobs and incomes, trust them, and trust small businesses to create the jobs and incomes once freed of unnecessary federal burdens.

No, these fresh faces that may soon be seen in the halls of Congress won't solve the nation's economic problems right away, but they can bring optimism, experience and voices of reason to fiscal policy debates, and demonstrate that small business is the true engine of American economic strength and stability.

A long and difficult task to restore the economy faces the next Congress. Regardless of who wins the most seats in either House or Senate, it is crucial that lawmakers' attentions stay focused on what's good for the nation, rather than trying to score political points for the next election.

Having more small business owners in Congress sharing their free enterprise optimism will contribute greatly to that goal.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.

Wednesday, October 27, 2010

Several initiatives around the state are moving forward during Energy Awareness Month, as declared this October by Gov. Jim Doyle.

Communities that received state EI (Energy Independence) pilot program funding in 2010 are holding public meetings to get input for their planning process. Those communities, which have pledged to work toward 25 percent renewable energy by 2025, the so-called 25X25 program, will come together Dec. 15 at Retzler Nature Center in Waukesha to make their pilot plan presentations.

Those communities include Chippewa Valley Partners and Eau Claire County, the E3 Coalition in Crawford and Vernon counties, Green Lake County, the City and County of Jefferson, the city of Kaukauna and Outagamie County, the city of Monona and Dane County, La du Flambeau Band of Chippewa and Vilas and Iron counties, Polk County, Shawano County, Waukesha County and the city of Whitewater and Walworth County.

“These communities are moving forward in their planning process and coming up with some great ideas,” said Brian Driscoll, community relations director for the Office of Energy Independence (OEI) at a public meeting for the E3 Coalition in Viroqua. “All across the state, there are innovative projects being planned and implemented.”

Todd Osman of the E3 Coalition, which includes 10 communities in Vernon and Crawford counties, said plans are moving ahead on several fronts. “We’ve been working on retrofitting county and city buildings to make them more energy efficient,” he said. “We received some great input at our public meetings for renewable energy projects.”

Initiatives that were discussed at the Viroqua meeting included using non-woody and woody biomass to generate electricity for local schools and institutions, anaerobic digesters for farms and wind power. The consensus seemed to be that projects should be developed locally. They then could become part of a patchwork of projects around the state.

While the 2010 EI communities are wrapping up their planning process, the 2009 recipients have already started to implement projects to save energy.

According to an Energy Center of Wisconsin study, the 10 communities that received EI pilot programs in 2009, collectively, project reducing their 2025 fossil fuel-based energy consumption by 30 percent and their 2025 carbon emissions by 40 percent. These are projections for 2025 based on the conversion to more renewable energy sources such as wind, solar and others, and energy-efficient measures.

Some of the communities are already realizing savings from the energy-efficient measures, such as retrofitting lighting, heating and cooling systems.

Communities included in the 2009 pilot program include Brown County, Chequamagon Bay and Bayfield and Ashland counties, the village of Osceola and Polk County, city of Marshfield and Wood County, city of Columbus and Columbia County, city of Evansville and Rock County, the cities of Platteville and Lancaster and Grant County, the city of Oconomowoc and Waukesha County, the Town of Fairfield and Sauk County and the village and town of Spring Green and Sauk County.

In addition to the EI program with units of government, several State Energy Program (SEP) grants have been announced in October.

SEP grants use money from the American Recovery and Reinvestment Act. Orion Energy Systems received $260,000 for the purchase of solar panels, writing and cabling for its Manitowoc plant.

Orion produces energy management systems for companies worldwide, including energy-efficient light fixtures, wireless control technologies and “direct use” renewable technologies. The company employs more than 200 people. The Manitowoc project is a $1.3 million investment overall.

McCain Foods USA Inc. received $1.1 million in SEP funding for equipment purchases that will increase the efficiency of the company’s heat recovery capabilities. McCain will spend $2.2 million overall to purchase new heat exchangers for its plant in Plover, where 650 people work.

The company is a subsidiary of McCain Foods Limited, an international corporation that is the world’s largest producer of French fries and frozen potatoes.

TecStar Manufacturing, a plastic injection molding manufacturer, received $3.75 million in SEP funds to build injection molding machines for solar panel frames. The total project cost is $15 million. TecStar will add 186 fulltime jobs for the project and already employs 170 at its plant in Germantown.

Betin Inc. of Belmont received $550,000 on SEP funds to develop an anaerobic digester to process whey and wastewater at its goat cheese plant.

These projects are part of more than $55 million in federal stimulus money that's going to help Wisconsin manufacturers bring down their costs through energy efficiency and renewable energy projects.

The state’s Energy Awareness Month is part of a nationwide initiative called, “Powering America: We’re On Target.” The theme “depicts how, across the nation, everyone is continuing to zero in on energy targets to stimulate the economy, lower operating expenses, reduce greenhouse gas emissions, and achieve long term energy and economic security,” according to the OEI web site.

“Wisconsin has made big steps forward in recent years through energy conservation, energy efficiency and by investing in a clean energy economy,” Doyle said in a press release. “Through greater awareness we can continue to increase our energy independence, save money for families and businesses, and create thousands of new clean energy jobs in Wisconsin."

-- Hoffmann has written on many topics for WisPolitics.com and WisBusiness.com. He writes the GreenBiz column monthly.

Tuesday, October 26, 2010

Having worked some forty years in the business world, mostly abroad, with many leaders in the business, political and church arenas, my observation is that the single most important ingredient for substantial "success" is the establishment of one or two world-class long-term, stretch goals. These goals should be established by benchmarking the best in the world and progress to be measured routinely and publicly.

For the Wisconsin, we only need two:

1. FOR YEAR 2030 A PER CAPITA INCOME 10% ABOVE THAT OF MINNESOTA

In job and business creation in the next 10 years, Wisconsin is often predicted to be amongst the lowest 10 states. When I was a kid growing up in Madison Wisconsin income was some 10 percent higher than Minnesota. They caught up in 1967, and now the average Minnesotan makes $4,500 more than us Wisconsinites. Yet, I believe we can compete with the Vikings on the field and Minnesota in the economic sphere.

Other states can attract 16 new good-paying, foreign automobile factories since the collapse of Detroit in the 1980s. Wisconsin zero. (We should not be 'shocked' when the Janesville GM plant closed as our last one.) Many groups from "Accelerate Wisconsin" to "Competitive Wisconsin" are admirably analyzing and working to bring hi tech and other jobs to Wisconsin. We know that Milwaukee's severe ills need much special attention. We must attract domestic and foreign investment; greatly increase venture capital funding, (now only 15 percent of Minnesota's); and bring in many more computer science, and managerial jobs that afford Minnesotans their higher incomes.

2. BY YEAR 2030 HAVE K-12 MATH, SCIENCE AND READING SCORES OF ALL NON-SPECIAL-ED WISCONSIN STUDENTS ABOVE WORLD CLASS STANDARDS

Wisconsinites often believe we lose jobs because of lower wages elsewhere. In fact, it is often the abundance of skills (and subsidies and effort) that bring huge Intel R&D labs to Bangalore, Microsoft research centers to Beijing, and advanced Micro Devices state of art chip factories to Dresden. Because our educational standards are based relative to the U.S., even if we "successfully" accomplish all of our State educational goals, our kids would still be in the global 'minor leagues.' How about targeting Finland/ Singapore in math...South Korea/Japan in Science...Canada in reading?

"When one does not know where one is going...any road will do" (or not do).

Without clear scorecards, us citizens will have little ability to coerce and evaluate politicians and their rhetoric/laws from the right and left. If JFK had not set a 'Man on the Moon' stretch target...would we have landed there? Do the Green Bay Packers have a chance at winning another Super Bowl if they never tack that stretch target to the locker room walls? ... If we Wisconsinites make these two goals our two priorities, above all other priorities, then workers and executives and all agitated citizens will eventually find ways/resources to arrive at these economic and education Super Bowl goals. ... That would indeed mean also the Wisconsin quality of life for all of us would soar!

Monday, October 25, 2010

MILWAUKEE – During a recent meeting at Manpower Inc.’s World Headquarters, a gleaming symbol of Wisconsin’s connections to global business, a European trade counselor asked his local hosts about public perceptions of trade. In essence, he wondered, do people in Wisconsin want more trade – or do they mistrust it?

In an election year such as 2010, the answer is more complicated than not.

The rules governing trade have once again become a campaign issue in Wisconsin, especially in the state’s hotly contested races for U.S. Senate and Congress. In large part, that’s because trade has become an emblem of the larger debate over job losses.

Some candidates insist that recent trade agreements – or their enforcement by federal and world trade officials – have hurt Wisconsin workers. Others say Wisconsin must face up to the reality of competition abroad and resist protectionist policies that would make it harder to ship Wisconsin goods and services overseas.

Until the Great Recession ended a long growth streak, Wisconsin’s exports were expanding at a rate that exceeded the U.S. average for this decade. In 1999, according to figures charted by the Wisconsin Department of Commerce, Wisconsin exported nearly $9.7 billion in goods and services. By 2008, that number had more than doubled to $20.6 billion before slipping to $16.7 billion in 2009. Even the 2009 total was still good for 18th among the 50 states.

The numbers confirm that Wisconsin grows, manufactures and produces a lot of things the world needs and wants. That’s fortunate, because one in 13 Wisconsin private-sector jobs are tied to the state’s ability to sell abroad.

While the North American Free Trade Agreement is once again the topic of political debate, it’s worth noting that Wisconsin’s biggest trade partners are the two largest NAFTA trade partners – Canada and Mexico. In fact, those two nations alone buy more than a third of all Wisconsin exports in any given year.

There was a time when U.S. manufacturers moved operations across the border to Mexico, but that trend appears to have slowed and even reversed itself as Mexico’s drug wars have become more violent. Today, if a Wisconsin manufacturer decides to expand elsewhere, it’s more likely to be South Carolina or Kentucky than Mexico.

China is now Wisconsin’s No. 3 trading partner, buying about $1.2 billion in goods and services in 2008 and $1.1 billion in 2009. When a Wisconsin company opens a facility in China, the primary business goals are to get closer to the world’s fastest-growing market and hold down transportation expenses, not to cut labor costs.

China’s thirst for imported goods and materials matches with some of the state’s historic and emerging strengths. Electrical machinery and equipment, medical devices, power generation equipment, oilseeds, plastics, “clean” technologies and wood products are high on China’s shopping list. If not for China, there would be no market for some recycled materials that are now commanding decent prices.

As one Wisconsin business owner who just returned from China remarked: “In 10 years, no one will be able to call it a developing country.” China is well on its way to being fully developed, and many Wisconsin companies don’t want to miss that upswing.

The state also makes gains when it attracts foreign investment, as was the case again this month when Seda International Packaging Group SpA of Naples, Italy, announced it will locate its new North American facility and 189 jobs in Racine County. Of course, some foreign investment is acquisition of existing domestic firms, which sometimes means the loss of state corporate headquarters.

While the rules of engagement over trade are far from perfect, voters should bear this fact in mind: Wisconsin cannot consume all of its goods and services within its own borders – nor can they be consumed within U.S. borders alone. Trade policies deserve careful scrutiny, but Wisconsin farmers, manufacturers and technologists must continue to produce locally and compete globally. Too many jobs depend on it.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Wednesday, October 20, 2010

PARIS – The train starts to pick up speed, almost imperceptibly, and within 20 minutes the Eurostar high-speed train has left Paris behind, quietly slicing through the French countryside at 185 miles per hour on its way to London.

Just over two hours later, the five-football-field-long train – one of 20 trains that day – deposits 500 passengers at the St. Pancras International station in central London.

The high-speed Eurostar announced last year it has now transported more than 100 million passengers. That’s 100 million business people, tourists, educators, students, 100 million generators of economic activity among nations that fought each other almost constantly for centuries.

When a Wisconsinite rides the Eurostar, it’s difficult not to reflect on Europe’s success and the debate we’re having over rail in Wisconsin. Or, more succinctly, the debate we’re not having – but ought to.

Wisconsin’s proposed rail system will be nothing like the Eurostar, of course. It will be relatively slow. The trains will be emptier and less efficient, at least at first. They won’t bring nations together or link destinations as world-famous as Paris and London.

But a trip on the Eurostar is a slap on the forehead. It’s a vivid example of what an investment in high-speed rail can do to accelerate growth and economic activity. It’s a window into the future for those willing to invest in a regional economy such as the “I-Q Corridor,” the intellectually rich route connecting Chicago, Milwaukee, Madison and the Twin Cities.

For Wisconsin “conservatives” opposed to rail (note the quotes), the Eurostar is a stark reminder that this debate isn’t about a train or the growth of government. It’s about economic growth, economic efficiency and the development of urban and rural areas alike.

Consider the latest breakthrough in Europe: Swiss engineers on Oct. 15 smashed through the last stretch of rock to create the world’s longest tunnel, a 35.4-mile Alpine route that will complete vital rail connections for both passengers and freight – shifting cargo off trucks and into rail cars.

Commerce aside, the efficiencies of the Eurostar alone should make a true conservative smile. Energy use is 10 times more efficient per passenger mile compared to cars and planes.

The Eurostar’s tickets are labeled “Your ticket to a carbon-neutral journey” because the trains are powered by electricity from nuclear power plants. The Eurostar purchased carbon offsets to offset the remaining carbon dioxide emissions from the portion of England’s electricity that comes from coal.

Roundtrip Eurostar ticket prices are priced at roughly what it would cost to park in Chicago for a day or two. And people use it, more than 30 million people alone last year.

Wisconsin is facing a concrete transportation reality: Single-passenger cars running on big highways represent the most expensive way to transport people in the modern world. Moving goods on highways by heavy truck is even worse, as highways intended to last a half a century now need to be replaced every 20 years or so at a cost of tens of millions of dollars per mile. And once highways are jammed to capacity, there is no cost-effective way to expand capacity except to add more lanes.

Rail is cheaper to build, easier to maintain, faster, more energy efficient – and expanding rail’s capacity is as easy as adding more cars or more trains.

We’ll never be Europe – and we shouldn’t be. Growth fueled by a highly flexible highway system is one reason we’re successful as a nation. Then again, it’s time to examine choices that can build on that success. We can look to the Eurostar’s highly efficient path – or follow the lead of Los Angeles and keep adding lanes to freeways that quickly become parking lots.

The proposed rail system between Milwaukee in Madison will be relatively slow and likely relatively expensive at first. That’s a tough compromise. But intercity rail would quickly catch on as Wisconsin learns to use it and the line is expanded to the Twin Cities, thus connecting the full I-Q Corridor and its powerhouse cities.

While the proposed system isn’t “high-speed” in the Eurostar sense, it’s a start. And it is an economic investment. Regardless of when we build it, rail will be part of our future transportation system. And we have $820 million in federal start-up money today – a good thing for a state that never sees its fair share of federal spending.

Let’s put the political posturing and phony economics aside and focus on an investment that makes true business sense – now and for the future.

-- Flaherty is president of Flaherty & Associates public relations in Madison. He is a former reporter for the Wisconsin State Journal and the Dow Jones News Corp.

Tuesday, October 19, 2010

MADISON – What if Wisconsin has produced a future Nobel Prize winner who might not be welcomed in his own state?

I’ve been thinking about that surreal possibility since the recent announcement of this year’s Nobel Prize in Medicine, which will go to the British scientist who pioneered in vitro fertilization, and the resurgent political debate in Wisconsin over human embryonic stem cell research, a trail blazed by UW-Madison scientist James Thomson.

The two are connected in some fundamental ways. The work of Robert Edwards, the British biologist who developed the procedure that led to the birth of the world’s first “test-tube” baby in 1978, was a precursor to human embryonic stem cell breakthroughs nearly 20 years later. Edwards demonstrated to most skeptics – although many still exist – that just because a technology can be abused, it doesn’t mean it will be abused.

In fact, for all the dire predictions of artificial wombs and “baby farms,” three decades of in vitro fertilization continue to produce results that bring smiles to most faces. To the relief and joy of infertile couples, nearly 4 million IVF babies have been conceived worldwide since the birth of Louise Brown – now a 32-year-old British postal worker.

The IVF revolution has advanced reproductive science and regenerative medicine by shedding light on genetic engineering, the cause of birth defects and more. Although it was an unplanned result, IVF has also provided the source of cells used in human embryonic stem cell research.

Here’s how: One side-effect of IVF is the occasional production of more than one fertilized embryo. Sometimes, couples choose to implant them all. Sometimes, those embryos are frozen and preserved for later use. A minuscule number are “adopted.” Most are quickly discarded, which is one reason why some opponents of IVF still question the ethics of the procedure to this day.

It was from those embryos destined to be discarded that researchers such as Wisconsin’s Thomson found cells suitable for research. With full permission from the couples involved, a tiny handful of those embryos yielded the first stem cells to be kept in an unchanging state. Thomson found a way to suspend in time these universal building blocks of the human body. If stem cells are prevented from changing into heart, liver or one of more than 200 other cells, they remain in a condition that allows further study.

More time to work with stem cells means scientists can search for better diagnostics and cures, test new drugs with greater accuracy and less toxicity, and unlock the secrets of some basic human biology. It is a science that promises to change the practice of medicine.

Some opponents of human embryonic stem cell research still insist research cells are derived from aborted fetuses or later-stage embryos. That’s not true. In fact, it’s impossible. Embryonic stem cells begin the process of changing into “adult” cells inside of two weeks. Only those cells that have yet to start the journey toward becoming a human can be used for research.

Perhaps the opponents of human embryonic stem cell research don’t understand that. More likely they do, and they still reject the science for the same ethical reasons some people still object to in vitro fertilization. Either way, it’s a debate that has crept back into the political domain – just in time for Wisconsin’s Nov. 2 elections.

Some candidates for state office say they want to eliminate state funding for embryonic stem cell research. The truth of the matter is that Wisconsin doesn’t spend much on stem cell research; it’s mainly financed through federal and private sources. But the signal sent by such a move would send a troubling message: Don’t bother doing cutting-edge science in Wisconsin.

That brings me back to Thomson and others who are conducting stem-cell research in Wisconsin, moving closer to treatments for conditions ranging from heart disease to eye disorders to diabetes. They could just as easily do that research in another state where their work is at least appreciated, if not partially financed.

In some future year, when the list of Nobel Prize winners is announced, don’t be surprised to see the name of Dr. James Thomson on the list. But if the state political debate over human embryonic stem-cell research continues down its current path, don’t be shocked if, by then, Thomson and other talented Wisconsin scientists like him are living and working in California.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Monday, October 18, 2010

Buying life insurance can be a tricky proposition. While virtually everyone realizes that it is a necessity, purchasing the life insurance policy that will work best in your particular situation is not always the easiest thing to do.

Your life insurance needs often depend on a number of factors, including whether you're married, the size of your family, the nature of your financial obligations, your career stage, and your goals.

There are a number of approaches you can use to figure out how much insurance you should have. One method, called the "family needs approach," focuses on the amount of life insurance it would take to allow your family to meet its various financial obligations and expenses in the event of your death.

Family needs approach With the family needs approach, you divide your family's financial needs into three main categories:

Immediate needs at death, such as cash needed for estate taxes and settlement costs, credit card and other debts including mortgages (unless you choose to include mortgage payments as part of ongoing family needs), an emergency fund for unexpected costs, and college education expenses.

Ongoing income needs for expenses related to food, clothing, shelter, and transportation, among other things. These income needs will vary in amount and duration, depending on a number of factors, such as your spouse's age, your children's ages, your surviving spouse's capacity to earn income, your debt (including mortgages), and whether you'll provide funds for your surviving spouse's retirement.

Special funding needs, such as college funding, charitable bequests, funding a buy/sell agreement, or business succession planning.

Once you determine the total amount of your family's financial needs, you subtract from this total the available assets that your family could use to defray some or all of their expenses. The difference, if any, represents an amount that life insurance proceeds, and the income from future investment of those proceeds, can cover.

Example: John and his wife, Wendy, are estimating the appropriate amount of life insurance to buy on John's life. They first estimate their immediate needs as follows:

* Providing for their dependent children's needs for a period of time: $500,000

* Wendy's income needs until her retirement: $450,000

* Wendy's retirement income needs: $380,000

Subtotal: $1,330,000

Adding the sub totals together, John and Wendy estimate that, should John die, their family would need $1,789,500. They then determine that assets available to offset their needs include:

* Bank savings: $40,000

* Investments: $220,000

* Retirement assets: $250,000

* Existing life insurance on John's life: $300,000

Subtotal: $810,000

The difference between their family needs ($1,789,500) and their available assets ($810,000) equals their life insurance need ($979,500).

Review your coverage Trying to figure out how much life insurance is enough isn't always easy, and that amount will likely change with your changing circumstances. By examining your family's anticipated expenses during various periods after your death, you get a more realistic estimate of your life insurance needs.

Unfortunately, many people underestimate their insurance needs and are underinsured. Often, the purchase of life insurance is based on cost instead of what's needed. By the same token, it's possible to have more insurance than you need. You may have purchased a large policy during a particular point in your life, and then didn't adjust your coverage when your insurance need was reduced.

Both of these circumstances are reasons to review your insurance coverage periodically with your financial professional. Doing so can reveal opportunities to change your levels of coverage to match your current and projected life insurance needs.

Thursday, October 14, 2010

CHICAGO – A few years back, I came up with the name “I-Q Corridor” to describe the 400 miles or so that extend from Chicago on the south to the Twin Cities of Minnesota on the north, with much of Wisconsin in between. It’s a way to highlight the technology assets of a larger region versus a single state: Innovation, intellectual property, investment make up the “I” and quality of education, workforce and life comprise the “Q.”

Brands can come and go, of course, but the notion of a world-class corridor of technology-based development has endured. In fact, it’s becoming more tangible as time passes.

The I-Q Corridor is home to more than 16.5 million people who live within a short commute of 1-90, 1-94 or 1-43 in Illinois, Wisconsin and Minnesota. It’s also a region with major research universities that account for nearly $4 billion in academic R&D projects, federal laboratories, companies in all technology sectors and financial centers with the ability to invest in emerging industries.

But it’s also a region with a common problem: No enough venture capital.

When the Brookings Institution studied the supply of venture capital in the Midwest, it concluded the region’s financial institutions and major investors provide about 40 percent of the venture dollars available in the United States – but the region only attracts 13 percent of total venture investments.

Why the huge gap? Much of the Midwest money invested in venture capital winds up on the East and West Coasts, mainly because too many institutional investors can’t break out of the mindset that all investment-worthy tech ideas emanate from California and Massachusetts.

That’s true despite the fact the Upper Midwest is the center of the nation’s medical device industry, home to major pharmaceutical companies such as Baxter, Abbott and Eli Lilly, and a hub for emerging energy technologies.

A Wisconsin investor likens it to the gold prospectors who are too late to the game. “People have always panned for gold in the rivers and streams around where others have found it before. They continue to do so long after those streams become crowded and the returns diminish to the marginal players,” said John Neis of Madison-based Venture Investors LLC.

Others are beginning to figure out there’s “gold” in the largely unpanned tech streams of the Midwest.

The State of Wisconsin Investment Board, which has about $80 billion in assets under management, issued a 2008 report that identified the Upper Midwest as a region rich in potential deals for investors. Most recently, SWIB signaled it may create a “catalyst portfolio” to attract top-tier venture capital firms looking for co-investment possibilities in Wisconsin and the I-Q Corridor.

The Midwestern Governors Association, meeting last month in Columbus, Ohio, spent the better part of two days discussing strategies to increase the supply of venture capital in the region. That meeting highlighted some best practices throughout the region, from Ohio’s Third Frontier to the Wisconsin Angel Network and beyond. Better yet, it attracted investors who wanted to learn more.

Other regional efforts are also focused on highlighted the assets of the I-Q Corridor. The Midwest co-Investment Network and the Midwest Research University Network have held three events, the latest of which was held Oct. 14 in Chicago, to foster better connections among angel investors who may want to invest jointly in some deals.

The Midwest co-Investment Network is comprised of 16 angel networks and funds that regularly share investment deals across state borders. The Midwest Research University Network connects leading R&D universities to discuss best practices surrounding “technology transfer,” which is the process of moving technology out of the labs and into the marketplace. Both groups have Wisconsin roots.

Other forums for highlighting a regional perspective include the MidAmerica Health Investors Network and the I-Q Corridor Investors’ Forum, a video conference link-up of investors reviewing investment deals from across the Midwest. Conferences such as the Wisconsin Early Stage Symposium, to be held Nov. 10-11 in Madison, historically attract investors from across the Midwest and beyond.

In an economic world defined by “knowledge-based” regions rich in research, innovation and talent, the I-Q Corridor can compete. There’s gold in those Midwest hills and streams – and it’s just waiting for more investors to discover it.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Tuesday, October 5, 2010

Human embryonic stem cell research is science the political right loves to hate, but the left has discovered a demon science of its own: nanotechnology.

In liberal enclaves such as Cambridge, Mass., and Berkeley, Calif., and within a public safety culture skilled at finding routes of least resistance to new government regulation, a movement is spreading to rein in nanotechnology for risks real, perceived and imagined. Unfortunately, Wisconsin appears to be a target.

A special study committee convened by the Wisconsin Legislature is considering state oversight of the burgeoning nanotechnology industry, even though many experts believe national and international safety standards would be more effective – and more efficient in promoting nanotechnology’s economic benefits.

While the committee’s work is far from done, one recommendation could be creation of a statewide nanotechnology registry that would require researchers and business people to disclose details about if – and how – they are working with nanomaterials. Such a registry would be a time-burning exercise that could drive nanotechnology research and businesses elsewhere.

Nanotechnology is a catch-all description for activities at the level of atoms and molecules that have applications in the much larger physical world. A nanometer is one-billionth of a meter, or about 1/80,000th the diameter of a human hair. Viewed another way, a nanometer is about 10 times the diameter of a hydrogen atom.

Nanotechology is a platform for advancing other sciences. It is about defining, fabricating and synthesizing materials, devices and systems that have features and functions at the molecular scale. The applications for bioengineering, genomics, optics, computer chips, robotics and materials science are so vast that scientists believe they’re only now scratching the surface.

Under that surface for Wisconsin is a scientific industry that fits well with the state’s advanced manufacturing, electrical equipment and medical device clusters, among others.

“Nanotechnology is about making stuff,” said John Biondi, president of Xolve Inc., a nanotech company based on research developed at UW-Platteville, “and in Wisconsin, we’re good at making stuff.”

It is estimated that nanotechnology will be a $3.1 trillion global industry by 2015, but its economic effect is still modest in Wisconsin. There are start-up companies such as Xolve and Oshkosh Nanotechnology, some more mature companies such as nPoint and some larger firms that employ nanotechnology in a variety of processes. But while Wisconsin’s colleges and universities are leaders in many research fields, a recent ranking of major U.S. universities showed UW-Madison outside the top 10 in nanotech patents.

Those are reasons not to stifle nanotechnology in Wisconsin before it has a chance to grow, according to a UW-Madison professor known nationally for his work in understanding public attitudes about nanotechnology.

“Unilateral regulations (at the state or local level) carry a serious risk of having Wisconsin fall even further behind other neighboring states, with potentially detrimental effects to the state economy,” wrote Dietram Scheufele, who holds appointments at UW-Madison and Arizona State University. He is currently a visiting fellow at Harvard University.

In a letter to the Legislative Council’s Special Committee on Nanotechnology, Scheufele noted that development of regulations are well underway at the federal level, and stressed that state and local efforts would “create competitive disadvantages within the United States and create nano clusters elsewhere.”

The largest “elsewhere” is China. American researchers are already falling behind China in terms of nanotech patents and research publications, with long-term implications for the U.S. economy and national security.

No scientist would claim working with nanoparticles is risk-free, but most resist the notion of state or local regulation. An exception is the Woodrow Wilson International Center for Scholars, which has cultivated the notion of nanotech regulation beyond the federal level. The Wilson Center’s Project on Emerging Nanotechnologies acknowledges political liberals are more likely to hold that view than conservatives.

“When exposed to balanced and accurate information, people who hold largely individualistic and hierarchical cultural outlooks tend to see nanotechnology as more beneficial,” the center noted in a 2007 report. “People who hold largely communitarian and egalitarian outlooks, in contrast, tend to see nanotechnology as more risky when exposed to that same information… The same polarization occurs between people who, in political terms, describe themselves as conservatives and those who describe themselves as liberals.”

In a world in which all research is portable, both within and outside national borders, America cannot afford to chill scientific endeavor for political reasons. Science is science. It’s neither liberal nor conservative, Democrat nor Republican. Let’s hope the Wisconsin Legislature embraces that principle, whether the science at hand involves working with tiny cells or atomic particles.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

Monday, October 4, 2010

A number of business and technology surveys this year indicate that companies are once again increasing their investment in Information Technology (IT) as a way of streamlining operations and enhancing business performance. One survey conducted last month by Skyline Technologies of Green Bay (WI) and the St. Norbert College Survey Center polled several hundred Wisconsin business and technology executives (from mid- and large-size Wisconsin companies) on the value that IT provides their firms.

This survey reported that 65 percent of the respondents are putting substantial and increasing resources towards IT in the next twelve months; with a whopping 91 percent of the respondents calling out IT as a key contributor of improved top- and bottom-line business performance. This same group also sees IT as critical for improved customer service, effective internal and external collaboration, cost control, and in running a quality operation.

The survey respondents (74 percent) believe that while there is considerable perceived value from their IT investments, there is also uncertainty about the actual return on investment (ROI) that IT provides. The survey respondents say they would like to find ways to substantiate IT’s value proposition so they can ensure that additional IT spending is appropriately targeted.

Trying to answer the question “What value does IT brings to my organization?” has been a goal of CEOs going back to the time when computers had vacuum tubes and programmers used punch cards. At one time or another, most CIOs have had to spend late nights and long weekends fabricating elaborate ROI justifications in the hope of convincing their CEOs or CFOs to sign-off on an IT project or next year's IT budget without first having to first sacrifice large parts of it on the altar of IT value.

The problem with trying to answer the IT value question is that it is essentially an unanswerable question. As the CIO-turned-business writer, Bob Lewis, says in his practical and very readable book, A Manifesto for 21st Century Information Technology, “There are no IT projects and there never were. IT doesn’t deliver value, it enables it.”

According to Lewis, all IT projects – yes, even IT infrastructure projects – are really business projects, in that they are about delivering business value. Specifically, three types of business value: increased revenue, decreased cost, or better-managed risk. That is it!

Lewis goes on to say, “In the same way that a hardware store provides you with tools to remodel your house but doesn’t do the remodeling, all IT can do is provide the tools business managers and end-users need to deliver value.”

Because there are no IT projects, only business projects, the role of the CIO is focused solely on providing the business with reliable estimates of the IT costs required to get the project done. Although the CIO must collaborate with his/her business partners in establishing a project’s value, it is the business’ responsibility to estimate, and then commit to, the business value of any IT-enabled project.

This is not to say that the CIO is off the hook when it comes to determining and then realizing the business value of an IT-enabled project. The CIO is still responsible for running the IT function in such a way as to deliver high-quality, agile, and cost effective IT services so that any IT-enabled project can return the highest possible value for the money invested. This, as anyone who has done it successfully will attest, is a major leadership challenge in itself.

Nor is the CIO a passive player when it comes to business governance. As a member of a firm’s executive team – which the CIO must be – the CIO participates with the other members of the executive decision-making team in determining the company’s project priorities.

Besides giving advice on how not to get dragged through the glass trying to justify IT’s value to your CEO, Lewis also challenges conventional IT wisdom concerning the need to embrace best practices, why relationships precede process, and the importance of establishing the right IT metrics for an organization.

A Manifesto for 21st Century Information Technology is an enjoyable read and I highly recommend it to CIOs or others involved, in any way, with their company’s IT function. Besides, now that you know that you don’t have to work so hard to justify IT’s value, you should have plenty of time to catch up on your reading!

-- Burzinski is a an IT executive and senior consultant specializing in business intelligence and IT/business alignment. In his 25-year career he has worked for several Fortune 500 companies headquartered in Wisconsin. Burzinski and his family live in Green Bay.